Rajaratnam, Chiesi Want More Information, Separate Trials

Jun 24 2010 | 7:19am ET

Galleon Group founder Raj Rajaratnam and former New Castle Partners executive Danielle Chiesi sought yesterday to throw a whole series of monkey-wrenches into the insider-trading case against them.

The co-defendants blasted the government’s case against them, demanding separate trials and more information about the allegedly illicit trades. One of Rajaratnam’s lawyers also asked a judge to exclude allegations added to the charges against the former hedge fund billionaire following his indictment in February.

According to the defendants, prosecutors have still failed to provide enough information about the trades on which they have been charged.

“It’s been heralded as the biggest hedge fund insider-trading case in history, and yet we don’t have the trades,” Robert Hotz, a member of Rajaratnam’s legal team, complained to U.S. District Judge Richard Holwell.

“We have given beyond what we are required to do,” prosecutor Reed Brodsky responded.

“One side says it’s all there and the other side says there is nothing there,” Holwell said, summarizing the situation.

Rajaratnam and Chiesi are among 21 people indicted in the largest insider-trading case in U.S. history. Eleven of those have pleaded guilty; nine others, including Rajaratnam and Chiesi, have pleaded not guilty. If convicted, both face in excess of 100 years in prison.

The two also sought to split their trials, arguing that only one of the seven counts against them pertains to both of them.

“The indictment tells different stories about these defendants,” Terence Lyman, another attorney for Rajaratnam, said. “The players aren’t the same, the dates aren’t the same, the stocks are completely different, and they have nothing to do with one another.”

Finally, Rajaratnam’s lead lawyer sought to exclude 10 stocks that prosecutors sought to add to the case in March, including AT&T Inc., Cisco Systems, Clear Channel and Goldman Sachs. Prosecutors say the additions are not new charges, but merely new details about the alleged conspiracy.

Holwell put off making a decision on the three defense requests. He is also yet to rule on the wiretaps at the center of the government’s case, which both Rajaratnam and Chiesi want thrown out. A hearing has been scheduled for late next month on that matter.

In Depth

Related-Company Fees: Normal Industry Practice or Conflicted Compensation?

Nov 11 2015 | 4:23pm ET

Regulatory agencies as well as investors are increasingly exploring whether certain...


Ferrari Roars in Wall Street Debut

Oct 21 2015 | 4:28pm ET

Shares of supercar maker Ferrari jumped as much as 15 percent to a high of nearly...

Guest Contributor

Private Debt - What is the Opportunity?

Nov 11 2015 | 3:28pm ET

In this contributed article, Rob Allard, founding partner of Firebreak Capital...


Editor's Note

    Oct 21 2015 | 10:41am ET

    One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…